abuss368 wrote: ↑Sat Nov 30, 2019 2:41 pm
My understanding is over the long term it should not make much difference between a US only portfolio compared to a US & International portfolio.
Then I read some of the statistics earlier going back over 100 years!
Perhaps the outperformance of the US may not continue and will evolve to the US and International returns being close.
Why then, assuming the returns of both US & International may be close moving forward (and that is a "may be"), would one want to include international when considering the additional risk should result in additional reward? I feel as if for all the additional risk assumed that I am never compensated in the form of additional return.
It appears as if the reward never shows up!
(I added the red
emphasis in the quoted post.)
Don't you think that a portfolio concentrated into the stock and bond securities of a single winning country, the US, could deliver a significant reward for its concentration risk
The thing is this: taking risk can result into great rewards, but it can also result into steep penalties, as Japanese domestic-only stock investors have learned over the last three decades.
Investing into a diversified portfolio which includes both domestic and international securities (possibly with a moderate home bias
) will always
underperform the higher performing market. A diversified portfolio is never
the best performing one.
Choosing investments based on emotions
is very dangerous to one's wealth; it can easily lead to investing into the best performing assets of the past. You've been a member of this forum since 2009 and you've written over 15,000 posts. I think that you know
that this wouldn't be a good approach to investing.
The goal of Bogleheads investing isn't to win; it's to not lose.
Broadly diversifying one's investments leads to boring
average returns. But, that's exactly what Bogleheads are looking for: reliably
getting average returns, guaranteeing that they'll never be losers!
P.S. This is a copy of the reply I made to your identical post on another thread.